PBT loss widened 91% as transaction revenue collapsed 61%

The driver was a 61% collapse in transaction revenue (NZ$7.3m from NZ$18.7m), which fell from 60.6% to 34.6% of total revenue, swamping a genuinely positive 21% lift in subscription revenue (NZ$10.7m). Total revenue fell 31.5% to NZ$21.1m.

Operating cash outflow widened to NZ$-4.5m from NZ$-2.5m. Cash on hand declined NZ$7.8m to NZ$10.2m over the year, reflecting ongoing cash consumption without a clear near-term path to operating breakeven. Capex was cut sharply — down 66.7% to NZ$1.7m — which cushioned the pre-lease free cash flow position at NZ$-6.2m, the lower edge of the company's historical range.

The business is structurally dependent on transaction revenue that is tied to engineering project deployment timing. When those projects stall, as occurred in FY24, revenue falls heavily because transactions carry lower gross margins (24% versus 86% for subscriptions) and the cost base does not flex proportionally. The PBT loss widening is therefore not a subscription-business deterioration — it is a volume-throughput problem in the transaction line.

Gross margin improvement masks cost base tension. Gross margin expanded 690 basis points to 60.2% as the mix shifted toward subscriptions, but this is a mechanical benefit of losing the lower-margin transaction volume, not an improvement in underlying unit economics. Operating losses widened because the fixed cost base remained largely intact against a much smaller revenue base.

Debtor days at 92 are 20 days above the historical mean. With receivable days rising from 59 to 92 and inventory days rising from 68.7 to 89.9, working capital cycle pressure is building even though the net operating working capital movement of NZ$-0.3m looks benign. This matters because it signals slower cash conversion from a revenue base that is already declining.

Management commentary indicates multiple contracts have closed that are expected to underpin greater than 50% SaaS revenue growth in FY25, which would, if delivered, substantially restore transaction and subscription volumes. At the HY24 stage, management attributed the transaction shortfall to project delays with long-term customers and anticipated multi-year volumes resuming. The full-year result is consistent with that framing — second-half revenue (NZ$10.6m) was essentially flat against first-half (NZ$10.5m), suggesting no material recovery materialised within FY24.

The FY25 growth claim requires both the contracted SaaS volumes converting to recognised revenue and the transaction pipeline recovering. Neither of these is yet visible in reported numbers, so the FY24 result provides limited direct support for the forward claim.

Pre-lease FCF of NZ$-6.2m is at the lower edge of the company's historical range, with cash now at NZ$10.2m. At the FY24 burn rate the runway is finite and clearly visible, making the FY25 revenue recovery thesis load-bearing for financial sustainability.

Capex compression to NZ$1.7m (from NZ$5.1m in FY23) helped FCF but raises the question of whether product investment has been deferred. Total assets declined NZ$7.2m to NZ$36.1m, below the historical mean of NZ$43.8m, reflecting cash consumption and reduced capitalised development.

This briefing cannot assess whether the contracted FY25 SaaS volumes have committed payment obligations or are contingent on customer project deployment.